Pp053118pursuing Womens Economic Empowerment

PURSUING WOMEN'S ECONOMIC EMPOWERMENT
May 2018
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G R O U P O F SEVEN
PURSUING WOMEN'S ECONOMIC EMPOWERMENT
Meeting of G7 Ministers and Central Bank Governors, June 1-2, 2018

Whistler, Canada
Prepared by staff of the

I N T E R N A T I O N A L M O N E T A R Y F U N D*
* The background note does not necessarily reflect the views of the IMF Executive Board.
PURSUING WOMEN’S ECONOMIC EMPOWERMENT
May 30, 2018
EXECUTIVE SUMMARY
The economic and social imperative for women’s economic empowerment is clear.
Greater gender equality boosts economic growth and leads to better development
outcomes. It contributes to reducing income inequality and boosting economic
diversification and, in turn, supports economic resilience. Gender equality is one of the
17 global UN Sustainable Development Goals, which provide a roadmap for ending
poverty, protecting the planet, and ensuring that all people enjoy peace and prosperity.
The G7 has emphasized the need for closing the gender gap. The Taormina Leaders’
Summit in 2017 renewed the emphasis on promoting women’s empowerment, which
the leaders see as a crucial contribution to promoting sustainable development. In this
regard, leaders committed to mainstreaming gender equality into all their policies. This
is carried forward by Canada’s G7 Presidency.
Gender inequality persists worldwide. Despite progress, women and men do not
have the same opportunities to participate in economic activity, and when women
do participate, they do not receive the same recognition, wages, or benefits as men.
The World Economic Forum estimates that at the current rate of progress it will take
217 years to close the overall global gender gap in female labor force participation
and equal opportunities.
Gender inequality takes different forms. Although the global average female labor
force participation rate hovers around 50 percent, the average rate masks significant
cross-regional differences in levels, from only about two-fifths of women participating
in the labor market in the Middle East, North Africa, and Central Asia to almost
two-thirds in sub-Saharan Africa. Gender wage gaps continue to be a global issue.
Although some countries have made important progress in closing earning gaps, on
average, women’s earnings are about half those of men. Low inclusion of women in the
labor market and political positions also reflects unequal opportunities in access to
education and health from early childhood and to financial services. It is also impeded
by the pervasive presence of gender-based legal restrictions in many countries.
The room for policy intervention is large, and interventions need to be tailored to
country circumstances. As recent research, including from the IMF, shows, policies
matter for women’s employment decisions even after accounting for personal
preferences towards working. Although there is no one-size-fits-all strategy, general
priorities include:
• Policies that focus on providing equal opportunities from the start: (i) investing in
education and health to provide a level playing field for women to take on
economic activities and reduce the gender gap in skills and income; (ii) increasing
access to financial services, including digital financial services, to provide women
with equal access to resources, which in turn fosters labor productivity; and
(iii) promoting equal rights for women in all areas, including the right to property
ownership. Developing countries can benefit the most from these policies.
• Measures that support women in balancing work and family responsibilities, such
as: (i) providing affordable, high-quality child and elderly care to support a more
rapid return to work among women who are “sandwiched” between taking care of
children and elderly parents and relatives; (ii) offering publicly financed parental
leave schemes to reconcile work and family life and maintain connections to the
labor market through a guaranteed return to the job; (iii) establishing flexible work
arrangements to allow women to better balance their formal employment with
other demands on their time; (iv) removing tax provisions that discriminate against
secondary (predominantly female) earners that can potentially generate large
efficiency gains and improve aggregate labor market outcomes; and (v) using tax
credits or benefits for low-wage earners to reduce the net tax liability thereby
increasing the net income gain from accepting a job. These policies can be
particularly effective in advanced economies and some developing countries.
With growing recognition that gender equality promotes economic stability and
growth, the IMF has scaled up its work in this area and is committed to continue
these efforts. Work by the IMF will focus on (i) deepening its understanding of the
economic benefits of women’s empowerment, both in the labor market and through
more equal opportunities for boys and girls, also against the background of persistent
megatrends, including in an environment of rapid technological change; (ii) integrating
the analysis into Fund policy dialogue with member countries; (iii) providing customized
assistance, workshops, and peer-learning courses in areas such as gender budgeting;
and (iv) expanding collaboration with other international institutions on the subject to
benefit from complementary areas of expertise.
2 INTERNATIONAL MONETARY FUND

Approved By Prepared by a team led by Stefania Fabrizio (SPR), comprising Lisa

Kalpana Kochhar Kolovich (SPR) and Monique Newiak (AFR). Research assistance was
provided by Annie Agarwal (HRD) and Rujun Joy Yin (SPR).
CONTENTS
I. INTRODUCTION _______________________________________________________________________________ 4
II. WHY DOES GENDER EQUALITY MATTER? AN ECONOMIC ARGUMENT ___________________ 5
III. HOW FAR HAVE WE COME? THE FACTS ON GENDER INEQUALITY _______________________ 7
A. More Equal Opportunities but Not the Same…Yet _____________________________________________ 8
B. Mixed Developments in Equality of Outcomes ________________________________________________ 10
IV. POLICIES TO FOSTER WOMEN’S PARTICIPATION IN ECONOMIC ACTIVITIES ___________ 12
V. THE IMF’S SUPPORT FOR COUNTRIES IN FOSTERING GENDER EQUALITY __________________ 16
References _______________________________________________________________________________________ 20
BOXES
1. Gender Budgeting ____________________________________________________________________________ 15
2. Operationalizing the IMF’s Work on Gender __________________________________________________ 19
FIGURES
1. Correlation Between Gender Inequality and Real GDP per Capita Growth ______________________ 5
2. Correlation Between Gender Inequality and Income Inequality ________________________________ 6
3. Correlation Between Gender Inequality and Export Concentration _____________________________ 6
4. Snapshot of Gender Inequality, 2013___________________________________________________________ 7
5. Gender Gaps in Education Enrollment and Literacy Rates ______________________________________ 8
6. Gender Inequality: Labor Force, Wage Gaps, and Political Representation ____________________ 11
INTERNATIONAL MONETARY FUND 3

I. INTRODUCTION
1. Gender equality is itself an important social objective, and the lack of it also imposes a
heavy toll on strong and inclusive growth. An important repercussion of persistent gender gaps is
that the potential economic contribution from women remains untapped in many countries. Greater
inclusion of women is associated with lower income inequality and higher economic diversification.
The latter, in turn, is related to increasing economic resilience, particularly in developing countries.
2. The G7 has emphasized the importance of reducing gender inequality and committed
to accelerate women’s economic empowerment. In the 2017 Taormina communique, leaders
noted that: “Promoting women’s empowerment and closing the gender gap is not only right, but
also smart for our economies, and a crucial contribution to progress towards sustainable
development. We are committed to mainstreaming gender equality into all our policies.” These
messages are carried forward by Canada’s G7 Presidency, which established the Gender Equality
Advisory Council for Canada’s G7 Presidency with the mandate to promote a transformative G7
agenda and support leaders and ministers in ensuring that gender equality and gender-based
analysis are integrated across all themes, activities, and outcomes of Canada’s G7 Presidency.
3. Despite progress, wide gender gaps remain. Gender inequality is observed in many forms.
This paper focuses on inequality of outcomes, such as female labor force participation, wages, and
leadership positions, and inequality of opportunities, such as access to health, education and
financial services. Globally, the average female labor force participation rate is more than
25 percentage points lower than the male rate, and the burden of unpaid care work
disproportionately falls on women and girls. Women are overrepresented in the informal sector and
underrepresented in leadership positions. Gender wage gaps, and earnings gaps more generally,
remain a global issue.1 Also, while equality of opportunities, such as access to health, education, and
financial services has improved, and the number of legal restrictions on women’s economic activity
has declined, the playing field remains uneven between men and women and boys and girls.
4. The scope for policy intervention is large. Economic policy levers can be used to reduce
gender inequality, but needs may vary across countries. Policies that focus on investment in
education, health, and infrastructure as well as on increasing financial inclusion and reducing legal
barriers can be particularly effective in developing countries. Policies such as addressing unpaid care
work and child/elderly care, parental leave, flexible work arrangements, and tax disincentives for
secondary earners can be very impactful in advanced economies and some developing countries.
5. The rest of the paper examines the importance of gender inclusiveness, analyzes
trends, and offers policy lessons for greater gender equality at a global level drawing on
recent analytical, policy, and operational work conducted at the IMF. It starts with a discussion
1 Women on average have lower overall earnings than men due to a variety of factors including having lower rates of
labor force participation, working fewer hours, and being more likely to be employed in the informal sector.
However, gender wage gaps, measured after controlling for observable characteristics such as hours worked, type of
employment, education levels, age, experience, etc. persist.

on why gender equality is integral to promoting economic stability, growth, and development
(Section II). Section III provides an overview of trends in inequality of opportunities between men
and women, including access to health, education, and financial services and legal barriers and
gender inequality of outcomes, including labor force participation and wage gaps. Section IV offers
broad policy lessons to support greater women’s participation in and gains from economic activities.
Section V discusses how the IMF supports countries in achieving gender equality.
II. WHY DOES GENDER EQUALITY MATTER? AN

ECONOMIC ARGUMENT
6. Beyond being a global goal, gender equality boost growth and promotes economic
stability. Gender equality is one of the 17 Sustainable Development Goals officially endorsed by
193 countries in 2015. A large literature has highlighted several dimensions in which gender inequality
has macroeconomic and development-related implications (Elborgh-Woytek and others, 2013). Reducing
gender gaps, both with respect to opportunities (ex-ante) and outcomes (ex-post), can…
• ...boost economic growth and

Figure 1. Correlation Between Gender
productivity. Women’s economic
Inequality and Real GDP per Capita Growth
empowerment is key for growth both 15
through the direct impact of the size of the
10
labor force on output and through the
Growth
CapitaGrowth
impact on productivity (Cuberes and 5
Teignier 2016; Figure 1). Recent studies by

0
Capita
IMF staff and others estimate that closing

perper
the gender gap could boost GDP in Canada -5

GDPGDP
by 4 percent (Petersson and others, 2017); -10

Japan by 4 percent (Steinberg and Nakane,
-15
2012); Pakistan by 30 percent (Cuberes and 0 20 40 60 80
Teignier, 2016); and Niger by 32 percent GenderInequality
Gender InequalityIndex → more
Index( (→ more inequality)
inequality)
(OECD, 2016; Cuberes and Teignier, 2015).2 Source: Gonzales and others (2015a).
Diversity and education can foster new ideas Note: GDP per capita growth derived based on a regression of
real GDP per capita growth on GDP per capita, to make rates
and thereby enhance productivity (Loko and comparable across levels of development.
Diouf, 2009). King and Hill (1991) find that
large gender disparities in education reduce gross national product―in countries where the
female-to-male school enrollment ratio is lower than 0.75, gross national product is
approximately 25 percent lower than in countries with greater gender parity in education. Klasen
and Lamanna (2009) provide evidence that gender gaps in education had a negative impact on
economic growth in the 1990s. Also, higher economic participation by women is related to higher
2Estimates of the growth impact of women’s empowerment depend largely on the factors considered in the
calculations.

expenditure on schooling for children, with important implications for growth in the long run
(Gonzales and others, 2015b).
• … lead to greater equality in the overall

Figure 2. Correlation Between Gender
income distribution. Gender inequality is
Inequality and Income Inequality
associated with higher income inequality
80
(Figure 2), which in turn can undermine the
Income Inequality (measured by net gini

70
sustainability of growth (Gonzales and others,
2015a; Ostry and others, 2014). This occurs 60 R² = 0.4482
through several channels. First, gender wage 50
coefficient)
gaps directly contribute to income inequality, 40
and higher gaps in labor force participation
30
rates between men and women result in
20
inequality of earnings, and unequal pensions.
In addition, women are more likely to work in 10
the informal sector, in which earnings are 0

0.2 0.4 00.6 0.8 1
lower. Finally, inequality of opportunities, such UN Gender Inequality Index (Re-estimated)
as unequal access to education, health Sources: SWIID; United Nations; and authors estimates.
services, and finance inhibit equal chances to Source: Gonzales and others (2015a).
Note: See Gonzales and others (2015a) for further
succeed on the labor market, and this is information on how the Gender Inequality Index was
strongly associated with income inequality, extended and calculated in a time-consistent manner.
particularly in emerging and developing
countries.
• … support higher corporate profits. Evidence for Europe suggests that female representation
in senior positions could boost potential output by improving firm profitability and supporting
corporate investment. IMF research also finds that adding one more woman to senior
management or a corporate board, while keeping the size of senior teams unchanged, is associated
with 8–13 basis points higher return on assets Figure 3. Correlation Between Gender
(Christiansen and others, 2016). Inequality and Export Concentration,
1990–2010
• … increase economic resilience. Gender 7
equality is associated with greater export 6

(Higher Values, lower diversification)
diversification in developing countries,

5
Export Diversification
reducing the risk of export concentration in R² = 0.404
few commodities (Kazandjian and others, 4
2016; Figure 3). Looking at the other side of 3
the coin, gender gaps in economic 2

participation tend to restrict the talent pool in
1
the labor market and can thus yield a less other low-income and developing
efficient allocation of resources, losses in total 0

0 0.2 0.4 0.6 0.8 1
factor productivity, and lower output Gender Inequality Index
growth (Cuberes and Teignier, 2016; (higher values, higher Gender Inequality)
Esteve-Volart, 2004). Source: Kazandjian and others (2016).

• … support bank stability. Sahay and others (2017) examine the gender gap in leadership positions
in banks and bank supervision agencies worldwide and find that, even after controlling for relevant
bank and country-specific factors, the presence of women as well as a higher share of women on
bank boards is associated with greater bank stability.
• … contribute to other development outcomes. Lower gender inequality has been linked to
improved health outcomes for women and children (World Bank 2011; and Knowles and others
2002). Positive associations have been identified between gender equality and per-capita GDP, the
level of competitiveness, and human development indicators (World Economic Forum, 2014; Duflo,
2012).
III. HOW FAR HAVE WE COME? THE FACTS ON GENDER

INEQUALITY
7. Gender inequities persist, in different degrees, across all countries. Women and men
do not have the same opportunities to participate in economic activity and when women do participate,
they do not receive, all other factors equal, the same recognition as men. In fact, the World Economic
Forum estimates that at the current rate of progress it will take 217 years to close the overall global
gender gap in economic participation and opportunity. The map shown in Figure 4 gives an overview of
average gender equality, as measured by a time-consistent version of the UNDP Gender Development
Index,3 which captures outcomes in the labor market as well as health and education gaps.
Figure 4. Snapshot of Gender Equality, 2013
Source: Stotsky and others (2016).

Note: Blue indicates higher gender equality; red indicates lower gender equality.
3See Stotsky and others (2016) for details on the index calculation, included a discussion on the advantages and
disadvantages of its use.

A. More Equal Opportunities but Not the Same…Yet
8. Access to education has become more gender balanced, but sizeable gaps remain
in many countries. Over the past three decades, there has been a steady decline in gender
differences in school enrollment across all regions. Between 1990 and 2015, gender gaps in primary
school enrollment have largely closed, although three regions still have not achieved parity (Africa,
Middle East and Central Asia, and Western Hemisphere). Furthermore, progress has been made in
reducing gaps in secondary school enrollment. Asia and the Pacific now have gender parity in
secondary education—particularly impressive given that just 65 females were enrolled for every
100 males in the region in the early 1980s. In Africa and in the Middle East and Central Asia, about
35 more girls are now enrolled in secondary education per 100 boys than in the early 1980s. However,
gaps in the two regions remain. Women are now more likely than men to be enrolled in tertiary
education in all regions except Africa (Figure 5).
Figure 5. Gender Gaps in Education Enrollment and Literacy Rates

Primary Education Enrollment Secondary Education Enrollment
(Female-to-male ratio) (Female-to-male ratio)
1.05 1.15
AFR APD EUR MCD WHD G7 AFR APD EUR MCD WHD G7
1.10
1.00
1.05
0.95
1.00
0.95
0.90
0.90
0.85
0.85
0.80 0.80
1990-94 1995-99 2000-04 2005-09 2010-16 1990-94 1995-99 2000-04 2005-09 2010-16
Tertiary Education Enrollment Adult Literacy Rate, 20161

(Female-to-male ratio) (In percent of people ages 15+)
1.6 100
AFR APD EUR MCD WHD G7
Male Female
1.4
80
1.2
60
1.0
40
0.8
20
0.6
0.4 0
1990-94 1995-99 2000-04 2005-09 2010-16 AFR MCD APD WHD EUR G7
Source: World Bank World Development Indicators.

1
2016 or latest available data. AFR = sub-Saharan Africa; APD = Asia and Pacific; EUR = Europe; MCD = Middle East,
North Africa, and Central Asia; WHD = Western Hemisphere.

9. Health indicators have improved globally, but maternal death and adolescent fertility
rates remain high in some countries, particularly in sub-Saharan Africa.
• The risk of maternal death has declined in all regions over the past three decades. Looking at
trends in maternal mortality ratios from 1980 to 2014 by region, sub-Saharan Africa has the
highest rate of mortality, but the rate now stands at half that in 1980. Asia and the Pacific and
the Middle East and Central Asia also achieved a significant decline in the maternal mortality
ratio, while the decline in the Western Hemisphere was gradual and remains slightly higher than
in Europe.
• Similarly, adolescent fertility rates—the number of births per 1,000 women ages 15 to 19—have
declined in all regions from 1980 to 2014, with sub-Saharan Africa having the highest average
rate. High fertility rates are associated with less economic activity by women. In particular, high
adolescent fertility rates prevent girls from going to school thereby increasing gender gaps in
education. Subsequently, these girls may remain out of the labor market altogether or enter the
labor market with a low skill level, exacerbating gender gaps in economic participation and
wages (Gonzalez and others, 2016).
10. Financial access has improved for both women and men, but the gender gap has
barely narrowed. The gender gap in financial access is systematic and persistent (Allen and others,
2012; Demirguc-Kunt and Klapper, 2013, 2012a, 2012b). Worldwide, only 65 percent of women have
a formal bank account compared with 72 percent of men, with much larger gaps in emerging and
developing countries (World Bank Global Findex, 2018), and gaps also in the use of financial services
such as credit and debit cards and borrowing services (Delechat and others, 2018). Women receive
approximately only 40 percent of outstanding loans. However, country-specific data also reveal
progress made in narrowing this gap. For instance, the IMF Financial Access Survey notes that
Malaysia saw its share of female borrowers increase from 37 percent in 2004 to 44 percent in 2016.4
11. Gender-based legal restrictions are still pervasive in many countries. The lack of basic
legal rights prevents women from participating fully in economic and political opportunities. Recent
IMF work estimates that in half of the countries studied, when gender equity was reflected in the
law, female labor force participation increased by at least five percentage points in the following five
years (Gonzales and others, 2015b). According to the 2018 Women, Business, and the Law Report,
globally over 2.7 billion women face legal restrictions from having the same choice of jobs as men;
such restrictions on women’s employment exist in all regions. In 18 countries, husbands can prevent
their wives from working, while in 59 countries, there are no laws against sexual harassment in the
workplace. Beyond laws and legal frameworks, social norms also cause gender inequality and can
negatively impact the effectiveness of even the best-calibrated policies.
4 Reliable data are essential to inform and enhance the overall understanding of financial inclusion. In this context,
there is in an increasing demand for more granular information including on the gender dimension of financial
inclusion. To this end, following up on the pilot exercises conducted since 2015 (see Section V), gender breakdown
was added to the IMF’s Financial Access Survey in 2018.

B. Mixed Developments in Equality of Outcomes

12. The last decades have seen important reductions of gender inequities in the labor
market worldwide, but challenges remain. Concerning gender inequality of outcomes, gaps in
labor force participation have been decreasing, and wage gaps have narrowed in many countries.
There has also been progress in increasing female representation in political and corporate
leadership positions. However, labor force participation rates, wages, and representation in
parliament remain well below parity in all regions (Figure 6).
13. Female labor force participation rates vary significantly worldwide, but labor markets
remain segmented across gender lines. Over the past three decades, there has been a general
trend towards more women entering the labor force in all regions except for the Middle East and
Central Asian region where it has plateaued. However, even where labor force participation rates
are high, the quality of jobs differs for men and women. In many countries women are
predominantly involved in the informal sector with low-paying and vulnerable jobs (United Nations
High Level Panel for Women’s Economic Empowerment, 2016) But also in countries with higher rates
of formality and female labor force participation, women tend hold lower quality jobs than men. For
example, a recent study by Hsieh, Hurst, Jones, and Klenow (2018) documents extensive productivity
losses stemming from misallocation of female workers across occupations in the United States. Both
labor force participation gaps and selection of women into low-quality jobs contribute to lower
growth.
14. Gender earnings gaps are a global issue. The World Economic Forum (2016) finds that, on
average, women’s earnings are about half those of men. However, some countries, spanning all
regions and income levels, have made progress in closing the earnings gap; for example, in
sub-Saharan Africa, the ratio of female-to-male estimated earnings approaches parity in Liberia
(World Economic Forum, 2017). In Benin, Botswana, Lao P.D.R., Mozambique, Namibia, Nicaragua,
Slovenia, Rwanda, and Vietnam, the ratio stands above 0.8. Research by the OECD shows that in
OECD countries, the gender gap for average annual earnings for full-time workers is larger for highly
educated workers (26 percent) than for less educated workers (22 percent) (OECD, 2017).

Figure 6. Gender Inequality: Labor Force, Wage Gaps, and Political Representation
Labor Force Participation Gap Gender Wage Gap, 20161
(Male minus female labor force participation, in percent) (Percentage points)
50 40
45 35
40 30
35 25
30 20
25 15
20 10
15 5
10 0
Israel
Portugal
Estonia
Germany
Sweden
France
Turkey
Switzerland
Ireland
Netherlands
Denmark
Poland
United States
Finland
Hungary
Norway
Greece
Spain
Italy
Slovenia
G7
Korea
Japan
Chile
Austria
Canada
Australia
United Kingdom
Iceland
New Zealand
Luxembourg
Czech Republic
Slovak Republic
Mexico
Belgium
1990-94 1995-99 2000-04 2005-09 2010-16
Average Percent of Female Seats in Parliament

30
25
20
15
10
0
1990-94 1995-99 2000-04 2005-09 2010-16
Sources: World Bank World Development Indicators, OECD.

1
2016 or latest available data. According to the OECD, the gender wage gap is unadjusted and is defined as the
difference between median earnings of men and women relative to median earnings of men. Data refer to full-time
employees and to self-employed. AFR = sub-Saharan Africa; APD = Asia and Pacific; EUR = Europe; MCD = Middle
East, North Africa, and Central Asia; WHD = Western Hemisphere.

IV. POLICIES TO FOSTER WOMEN’S PARTICIPATION IN

ECONOMIC ACTIVITIES
15. The room for policy intervention is large. Policies matter for women’s employment
decisions even after accounting for personal preferences toward working (Christiansen and others,
2016). That said, needs often vary across countries by income and development levels. Also, some
measures could imply fiscal costs that may require resource mobilization if fiscal space is not
available.
16. In general, policies should focus on investing in education, health, infrastructure,

increasing financial inclusion, and promoting equal rights. Unconditional cash transfers can also
play an important role where there is a greater need to ensure protection of the informal sector.
Low-income and developing countries in particular can benefit the most from these policies.
• Education. Empirical evidence suggests that educational attainment correlates positively with
female labor force participation (Gonzales and others, 2015b; World Bank, 2011). In Turkey, for
example, only 17 percent of illiterate women participate in the labor force, while the
participation rate exceeds 70 percent among women holding a graduate degree (Ercan, Hoşgör,
and Yimlaz, 2010). Countries such as Nigeria and Pakistan have used conditional cash transfers
to increase female school enrollment (IMF, 2016a; IMF, 2016b). In Nigeria, the scheme included
targeting to poor households and linked to girls' enrollment in school.
• Health. Evidence suggests that developing countries can go a long way in increasing economic
opportunities for women by investing in healthcare (World Bank, 2011). Rwanda has
outperformed its counterparts in reducing maternal mortality rates from 1990 to 2013, and this
is associated with an increase in health expenditures as a share of GDP (Kadama and others,
2018). There was an increase of about seven percentage points from 2000 to 2014 in the
percentage of women who received prenatal care from a skilled provider; thus, by 2014, almost
100 percent of Rwandan women were receiving this type of care.
• Access to infrastructure. Availability of safe transportation and better roads and mobile networks
can help greatly women access work in many countries at different development levels and
regions, from Rwanda to Jordan to Chile (IMF, 2017a; IMF, 2016c; and IMF, 2015a). Mexico
introduced public transport buses for women only to ensure that they could travel safely (Perez
Fragoso and Rodriguez Enriquez, 2018). The 2017-18 Gender and Child Budgeting plan for the
Indian state of Kerala includes planned allocations aimed at providing gender-friendly
infrastructure (Kolovich and Loungani, 2018). The provision of sanitation facilities, in particular in
lower-income countries such as India, helps protect girls from incidences of gender-based
violence and can increase school attendance (IMF 2017d; Jain-Chandra and others 2018).
• Access to finance, including digital financial services, could impact labor productivity and is
associated with more equal incomes across countries (Aslan and others, 2018). Results from the
2017 IMF Financial Access Survey, which features gender-disaggregated data from 27 countries,

show a steady increase in the share of female borrowers in Chile, Indonesia, and Malaysia from
2012–16. Initiatives such as Malaysia’s Women Entrepreneur Financing Program and Chile’s
Simplified Deposit Accounts may have helped close the gender gap in borrowing rates.
• Promoting equal rights for women to participate in property ownership and entrepreneurship,
including by addressing female inheritance legislation, equal property rights, and laws against
discrimination can stimulate female labor force participation (Novta and Wong, 2017). Malawi,
Namibia, and Peru revised their legal frameworks to reduce gender discrimination, and in the
decade following those changes, all three experienced substantial increases in female labor force
participation rates (Gonzales and others, 2015b).
17. Policies can focus on investing in child and elderly care and parental leave, providing
work flexibility, and reducing tax disincentives for secondary earners. This can be particularly
impactable in advanced economies but is also applicable in some developing countries.
• Providing affordable, high-quality child and elderly care could support a more rapid return to
work among women. Significant increases in life expectancy result in a longer period in which
adults may have both parents and children who will need assistance, which is usually provided
by women. This phenomenon is particularly pronounced in advanced economies, but it is
becoming an obstacle to women’s ability to participate in paid economic activities in emerging
economies as well. In Mexico, one-third of women aged 25 to 44 spend at least 40 hours per
week caring for both children under age 14 and elderly, dependent, or disabled individuals
(Rogriguez-Chamussy and Lopez, 2018). In this context, incentives for caregivers to remain
active in the labor force, such as pension credits, should ensure that they are not penalized by
returning to work.
• Offering publicly financed parental leave schemes can help parents reconcile work and family life
and maintain their connections to the labor market through a guaranteed return to their job.
The average duration of paid parental leave in advanced economies is 26 weeks, and all OECD
countries except the United States and Korea offer paid parental leave (Elborgh-Woytek and
others, 2013). However, long periods outside the labor market could also lead to reductions in
skills and earnings (Ruhm, 1998). Policies that provide and encourage greater parity between
paternity and maternity leave could support a more rapid return to work among mothers and
help shift underlying gender norms (World Bank, 2012). In addition, countries may want to
consider a “use-it-or-lose-it” parental leave allowance, such as in Sweden, to promote more
equal sharing of leave.
• Establishing flexible work arrangements allows women to better balance their formal
employment with other demands on their time (Aguirre and others, 2012). Flexible work
arrangements and more specifically, part-time work, serve as examples of policies that both men
and women can benefit from in balancing their paid work with the time allocated to family
commitments. However, due to the traditional intra-family division of labor, the availability of
such arrangements tends to be more important for women. The modalities for flexible work

arrangements are both country- and company-specific and can include telework and
compressed work schedules.
• Removing tax provisions that discriminate against secondary earners. Empirical studies show that
the female labor supply is more responsive to taxes than the male labor supply (IMF, 2012).
Hence, reducing the tax burden for (predominantly female) secondary earners by replacing
family taxation with individual taxation can potentially generate large efficiency gains and
improve aggregate labor market outcomes. Many advanced economies, in particular, European
countries, have the potential to reduce the secondary earner tax wedge significantly
(Elborgh-Woytek and others, 2013).
• Using tax credits or benefits for low-wage earners. These “in-work” tax credits reduce the net tax
liability thereby increasing the net income gain from accepting a job. Typically, they are phased
out as income rises; however, the phasing out of the credit with family income results in high
marginal tax rates for both the primary and secondary earner in a family, creating strong adverse
labor supply effects among secondary earners. In countries that emphasize labor force
participation, credits are instead phased out with individual income, which offers a preferable
policy alternative to increase female labor force participation, as the marginal tax rate applied to
the secondary earner will generally remain lower (Elborgh-Woytek and others, 2013). This
approach is followed in Belgium, Finland, Germany, the Netherlands, and Sweden.
18. Fiscal policy design and budget systems can also play a large role in reducing gender
inequality. Fiscal authorities can ensure that tax and spending policies and/or public financial
management instruments address gender inequality and the advancement of women in areas such
as education, health, and economic empowerment (Budlender and Hewitt, 2003; Budlender and
Sharp, 1998; Elson, 2003; Stotsky, 2006, Stotsky, 2016, and IMF, 2017). The approach is called
gender-sensitive or gender-responsive budgeting. If designed well, gender budgeting can improve
the efficiency and equity of the overall budget process. Fiscal authorities at any level of government
can assess the needs of boys and girls and men and women; identify key outcomes or goals; plan,
allocate, and distribute public funds; and monitor and evaluate achievements (Box 1).

Box 1. Gender Budgeting

Sound fiscal policies can promote macroeconomic stability, which is essential for boosting growth, jobs, and
incomes for all citizens. But fiscal policy can also be actively shaped to achieve gender equality goals―the
basic idea behind gender budgeting. With gender budgeting, fiscal authorities consider the expected
benefits of gender equality and women’s empowerment for both women and society as a whole. Gender
budgeting in a broad sense involves both the adoption of fiscal policies (on the expenditure and revenue
side) related to gender equality and gender-responsive public financial management. Well-designed gender
budgets can improve the efficiency and equity of the overall budget process and improve gender-related
outcomes. For example, gender budgeting in Morocco is associated with an increase in female primary
school enrollment in rural areas by more than 18 percentage points over 10 years (Kolovich and Shibuya,
2016). In India, states with gender budgeting efforts have made more progress on gender equality in
primary school enrollment than states without (Stotsky and Zaman, 2017).
Results from a global study (Kolovich, 2018)1 on gender budgeting as well as from research focused on G7
countries (IMF, 2017c)2 show that:
• Gender budgeting has been implemented by countries across all regions and income levels and at the
national, state, and/or local levels. Countries with state and/or local level initiatives include Germany,
India, Mexico, Spain, and Uganda.
• The leadership of the ministry of finance is crucial. Ministries of finance can promote gender budgeting
by including requirements in the budget call circular; Afghanistan, Albania, Ecuador, Finland, the
Philippines, and Sweden are a few examples of countries that include gender budgeting instructions in
budget call circulars.
• Legal requirements for gender budgeting matter: Austria, Bolivia, and Rwanda mandate gender
budgeting in their constitutions.
• Public financial management institutions play an enabling role in operationalizing gender-responsive
fiscal policies and can be adapted to achieve improved gender outcomes at the various stages of the
budget cycle. Ukraine’s gender budgeting effort has been implemented within the framework of public
financial management reforms.
• Civil society, gender and other ministries, parliaments, and academia are also key players. The United
Kingdom’s Women’s Budget Group and Canada’s Alternative Federal Budget are two examples of civil
society organizations. Gender units in line ministries have proved useful in gender budgeting
streamlining, but in some countries coordination of these units is found to be an issue. Political support
may be particularly important when additional resources and concerted efforts across the administration
are needed, such as for the development of gender-related indicators.
• Gender budgeting has typically focused on expenditures and overlooked taxes, but tax policies are not
always gender neutral. Discriminatory tax and financial laws remain in many legal systems. Several
countries have incorporated a greater focus on revenues, including Finland, Iceland, India, and Uganda.
A significant number of countries engaged in gender budgeting have not incorporated program or
–––––––––––––––––––––––––
1
This global survey was part of a joint research collaboration between the IMF and the UK Department for International
Development.
2
The IMF developed an analytical framework to study how gender budgeting is applied in different countries from the
public financial management viewpoint. Both the global study (Kolovich, 2018) and the G7 study (IMF, 2017c) relied on
questionnaires sent to the ministries of finance for IMF member countries, among other sources. Recent updates to the
G7 survey focus on South Eastern and Southern European countries and some Central American countries.

Box 1. Gender Budgeting (concluded)

performance budgeting, though it is widely recognized that these practices can improve the
effectiveness of gender policies.
To strengthen gender budgeting efforts, countries should aim to improve reporting, transparency, and
cooperation between various levels of government. Gender budgeting statements can help ensure
transparency. Australia, Bangladesh, Canada, India, Korea, Morocco, and Nepal have issued various forms of
these statements. Collecting gender-disaggregated data to allow for better gender-based analysis is also
important. Ex-ante impact assessments of gender policies, as well as ex-post monitoring and gender
auditing are common gaps in most surveyed countries. Among the G7 countries, Japan and France have
made the most progress in systematically collecting fiscal data disaggregated by gender, thought they have
not yet published these data in the annual budget documentation. Korea stands out as one country that
requires that the government examine the gender impacts of the budget and whether men and women are
equally receiving benefits from the budget.
19. Importantly, achieving gender equality requires cooperation between various levels of
government as well as non-governmental actors. For example, in Mexico, the federal government
earmarked resources nationally for women’s health and economic empowerment programs, and
locally, Mexico City implemented a program aimed at providing safe public transportation options
for women. Uganda’s “local budget clubs” allow citizens to discuss spending priorities and maintain
government accountability. In both Germany and Spain, gender budgeting initiatives have been
introduced at the local level. Civil society, gender and other ministries, parliaments, and academia
are also pivotal players in promoting transparency, conducting gender-based analysis, and
development a legal framework for gender equality policies in a country. The United Kingdom’s
Women’s Budget Group started in the 1980s and conducts a thorough annual, gender-sensitive
analysis of the budget. Canada’s Alternative Federal Budget is another example of how civil society
organizations are working to ensure a gender perspective in fiscal policies.
V. THE IMF’S SUPPORT FOR COUNTRIES IN FOSTERING

GENDER EQUALITY
20. Gender equality promotes economic stability and growth―key objectives under the
Fund’s mandate. The focus on inclusive growth has been enforced by the evidence of the link
between inequality, including gender, and lower and less sustainable growth. Thus, gender issues
are increasingly featured in the Fund’s work program. The 2013 IMF Board paper “Jobs and Growth:
Analytical and Operational Considerations for the Fund” (IMF, 2013a) and the accompanying
Guidance Note (IMF, 2013b) noted the need for IMF work on issues related to jobs and growth—
including gender inequality—to be consistent with its mandate and areas of expertise. In 2015, the
Article IV Surveillance Guidance Note (IMF, 2015b) was updated to cover emerging issues and
included the operationalization of gender issues in the IMF Board work program. The IMF is working
on a “how-to” note (IMF, forthcoming) that provides an overview of good practices in covering
gender issues in its country work and therefore provides guidance to IMF teams that are increasingly

covering this issue in their work. The IMF has done extensive analytical and policy research on
gender-related issues. Its operational work on gender is along its three main work streams:
surveillance; use of Fund resources (financial assistance to Fund members), and provision of
technical assistance (which includes capacity development and training).
21. Analytical work at the IMF examines the underlying drivers of gender equality and
how they relate to sustained and inclusive growth. Research has focused on the economic
gains from gender equity as well as policies to enhance women’s empowerment and participation
in economic activities. Recent work includes explores legal restrictions,5 financial inclusion,6
female labor force participation,7 access to infrastructure,8 and gender budgeting.9 Ongoing
Fund work examines: (i) the impact of technological advancement on the future of work,
focusing on gender differences in labor market outcomes across countries (Brussevich and
others, forthcoming; Jain-Chandra and others, 2018); (ii) the relationship between gender
diversity and structural transformation, for example, shifting from working in traditional
agriculture to services, in developing countries and the resulting effect on productivity and
growth (Ostry and others, forthcoming); (iii) the potential gains in female labor force participation
resulting from tax-and-transfer reform in a number of advanced economies (Wingender and
Moreno-Badia, forthcoming); and the link between gender gaps and financial resilience, analyzing
gender gaps not only in access to and use of finance, but also in the inclusion of women among
financial services providers and regulators (Sahay and Cihak, forthcoming). Analytical and policy
work informs IMF’s operational work.
22. Gender issues will be covered in IMF’s surveillance when they are macro-critical. In
2015, the Fund adopted a more systematic approach on gender issues, integrating analysis of
gender equality into its regular consultations with member country authorities (referred to as Article
IV consultations) with specific members under a pilot initiative (Box 2). These covered
macroeconomic and labor market policies, including the impact of female labor force participation
on productivity and growth, gender gaps in financial inclusion, and legal barriers to women’s
economic participation, among others. The effort has covered almost a fourth of its member
countries spanning all geographic regions and included advanced, emerging market, and low-
income and developing economies. Gender inequality has also been considered in the context of
Fund-supported programs. The recent IMF-supported program for Egypt focuses on investing in
public nurseries and is working towards implementing gender budgeting (IMF, 2017f). The program
for Jordan contains a range of measures to reduce child-care costs, including publicly-subsidized
nurseries for low-income employees in small and medium size enterprises (IMF, 2016c). In Niger, the
program includes conditionality on formulating a gender development plan (IMF, 2016d). Following
the conclusion of the third and final phase of the pilot initiative, the plan is to incorporate gender
5 See Gonzales and others, 2015a.

6 See for example, the 2017 Financial Access Survey, which includes gender disaggregated data and Delechat and others,
2018.
7 See for example Christiansen and other, 2016; Elborgh-Woytek and others, 2013; Khera, 2016; Kochhar and others.,
2017; and Novta and Wong, 2017.

8
See IMF, 2017d; IMF, 2017e.
9 See IMF, 2017c; Kolovich, 2018; and Stotsky, 2016.

issues into Article IV consultations with the entire membership wherever they are sufficiently
relevant under the Fund’s mandate. Furthermore, if gender equality issues are considered by the
IMF as critical for the success or monitoring of a Fund-supported program, then they will be
addressed through program design and conditionality.
23. The IMF technical assistance and capacity development work on gender-related issues
has also expanded. Through training courses for country authorities and technical assistance
missions, the Fund is increasingly engaging with its membership on various aspects of gender
equality. Technical level staff in many countries benefit from additional training on conducting
gender-based analysis and implementing policy recommendations. To address this need, the IMF
has offered workshops, in partnership with ministries of finance and/or gender and UN Women at
IMF regional technical assistance centers. These joint workshops at IMF regional capacity
development centers have brought countries together through peer-learning workshops to
disseminate best practices and share experiences within the region and with partners from other
regions. The IMF has worked with 60 countries thus far, including at our regional centers in
Barbados (CARTAC), Guatemala (CAPTAC-DR), India (SARTTAC), Mauritius (ATI), and Austria (JVI).
Furthermore, in early 2018, staff delivered a workshop to the Gender Budget Council and the
Ministry of Finance of the United Arab Emirates, as a framework to the design of the Action Plan of
Gender Budgeting Implementation in the country. The IMF has also provided technical assistance on
gender budgeting in Bahrain, Cambodia, and Ukraine, among others. Additional technical assistance
missions and peer learning workshops are planned for 2018. The Fund is currently developing a
toolkit that will provide staff, country authorities, civil society organizations, and academics with
user-friendly charts and graphs highlighting key indicators of gender inequality by country and
region. In addition, the toolkit will allow users to identify which gaps are contributing to
macroeconomic losses (such as a reduction in GDP growth or per capita income) and identify policy
prescriptions that can be used to close the gaps. It has also extended its modeling framework for
macro and distributional impact of policies to analyze the impact on gender inequality. The
extended framework has been applied to Argentina and Iran to analyze the macroeconomic and
distributional impact, including on gender, of possible tax reforms and measures to reduce the
gender gaps and discrimination (IMF, 2018a and 2018b).
24. Looking ahead, the Fund will continue with its efforts to foster gender equality.
Promoting gender equality can not only strengthen economies through higher economic growth
and stability but can also bring significant change and benefits to people’s lives. The Fund, in
accordance with its role and mandate, is prepared to support our members in these important
efforts.

Box 2. Operationalizing the IMF’s Work on Gender

To support surveillance and program discussions, the IMF has stepped up efforts to operationalize its work
on gender inequality. Under a pilot initiative that started in 2015, gender inequality issues have been included in
policy discussions in 38 countries.
The pilot studies have examined a variety of issues, from barriers to female labor force to the impact of specific
reforms and policies on gender inequality and potential economic gains from eliminating gender inequality in
countries at different level of developments. Advice was provided in different areas, including:
• Financial inclusion. IMF staff assessed the level of access to formal and informal financial services, microfinance,
and mobile banking (India, Rwanda); impediments to access to formal finance through participation costs,
borrowing constraints, and intermediation costs (Guatemala); and financial literacy among women (Jordan)—
even in the context of overall high financial development (Mauritius). These analyses suggest that enhancing
financial inclusion would increase female labor force participation and entrepreneurship, support small and
medium size enterprises, and improve competitiveness and boost potential growth (India, Pakistan).
• Labor market reforms and human capital accumulation. IMF staff analyzed ways to address skill mismatches,
lack of private sector labor demand, the need for supply-side policies (including education to provide relevant
skills) (Chile, Hungary, Iran, Mali), low human capital accumulation (Guatemala), labor market rigidities (India),
and labor market duality (Japan) to increase female labor force participation in the formal sector and accumulate
human capital.
• Impact of policy measures on gender equality and female labor force participation. IMF staff identified the
need for increasing access to education; investing in infrastructure and information technology (Canada, India,
Japan); reforming the tax system (individual taxation (Germany), working tax credits (Italy), and spousal tax
deductions (Japan); and reassessing social spending measures (provision of childcare (Austria, Egypt, Hungary,
Japan, Jordan, Poland), long-term care for the elderly (Austria), and cash transfers targeting girls’ education), to
help address gender inequality and female labor force participation (Guatemala, Jordan, Morocco, Nigeria,
Pakistan).
• Gender budgeting. For Morocco, IMF staff highlighted the scope for improving gender budgeting. Rwanda
offers insight into several best practices. Also, staff reports have pointed to progress in enshrining gender
budgeting into legal or formal budgetary frameworks in various countries. A recent example is Canada, which
published its first gender statement in the 2017 federal budget. Other examples include Iceland and Nigeria.
Iceland has restructured its budget practice (revenues and expenditures) to include formal adoption of gender
budgeting, and Nigeria has introduced gender-sensitive budgeting targeted to women in the agricultural
sector.
• Access to infrastructure. IMF staff discussed how the availability of safe transportation, better roads, and
mobile networks help women participate in the labor force in Chile, Jordan, and Rwanda. In India, staff pointed
to the need for rural infrastructure investment in sanitation, access to drinking water, and transportation to
reduce the time women spend on domestic tasks and to facilitate their access to markets.
• Legal barriers. IMF staff noted that inequality in inheritance rights (Morocco, Niger, Pakistan), tax deductions or
tax credits specific to men (Morocco), and regulations preventing women from working at certain institutions
and positions (Niger) impact gender gaps in labor force participation. In at least half of WAEMU countries,
women cannot be head of household. In contrast, in Latin America and the Caribbean, progress in equalizing
legal rights for women and men has helped increase female labor force participation—though more needs to
be done.

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PURSUING WOMEN'S ECONOMIC EMPOWERMENT

Electronic copies of IMF Policy Papers

International Monetary Fund

© 2018 International Monetary Fund

PURSUING WOMEN'S ECONOMIC EMPOWERMENT

Meeting of G7 Ministers and Central Bank Governors, June 1-2, 2018

Prepared by staff of the

2 INTERNATIONAL MONETARY FUND

Approved By Prepared by a team led by Stefania Fabrizio (SPR), comprising Lisa

II. WHY DOES GENDER EQUALITY MATTER? AN ECONOMIC ARGUMENT ___________________ 5

IV. POLICIES TO FOSTER WOMEN’S PARTICIPATION IN ECONOMIC ACTIVITIES ___________ 12

V. THE IMF’S SUPPORT FOR COUNTRIES IN FOSTERING GENDER EQUALITY __________________ 16

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II. WHY DOES GENDER EQUALITY MATTER? AN

• ...boost economic growth and

impact on productivity (Cuberes and 5

Teignier 2016; Figure 1). Recent studies by

IMF staff and others estimate that closing

the gender gap could boost GDP in Canada -5

by 4 percent (Petersson and others, 2017); -10

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• … lead to greater equality in the overall

Income Inequality (measured by net gini

through several channels. First, gender wage 50

the informal sector, in which earnings are 0

equality is associated with greater export 6

diversification in developing countries,

reducing the risk of export concentration in R² = 0.404

few commodities (Kazandjian and others, 4

2016; Figure 3). Looking at the other side of 3

the coin, gender gaps in economic 2

efficient allocation of resources, losses in total 0

Esteve-Volart, 2004). Source: Kazandjian and others (2016).

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III. HOW FAR HAVE WE COME? THE FACTS ON GENDER

Figure 4. Snapshot of Gender Equality, 2013

Source: Stotsky and others (2016).

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A. More Equal Opportunities but Not the Same…Yet

Figure 5. Gender Gaps in Education Enrollment and Literacy Rates

Tertiary Education Enrollment Adult Literacy Rate, 20161

Source: World Bank World Development Indicators.

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B. Mixed Developments in Equality of Outcomes

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Average Percent of Female Seats in Parliament

Sources: World Bank World Development Indicators, OECD.

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IV. POLICIES TO FOSTER WOMEN’S PARTICIPATION IN

16. In general, policies should focus on investing in education, health, infrastructure,

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Box 1. Gender Budgeting

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Box 1. Gender Budgeting (concluded)

V. THE IMF’S SUPPORT FOR COUNTRIES IN FOSTERING

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5 See Gonzales and others, 2015a.

2017; and Novta and Wong, 2017.

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